India has issued a notice against German car manufacturer Volkswagen. Allegedly, the company has ‘intentionally’ evaded huge taxes in India. Which amounts to about 1.4 billion US dollars!
India has claimed that the German company has deliberately given low import duty to India for all the equipment that Volkswagen has to buy to make Audi, VW and Skoda cars.
According to the data, this case of tax evasion is one of the biggest among such cases so far.
According to various media reports, the notice issued on September 30 stated that Volkswagen had actually imported ‘almost the entire vehicle’! However, those imports are mainly as parts. That is, they imported almost all the parts of the car in unassembled state.
In this case, under the ‘Completely Knocked Down Units’ or CKD policy, India is supposed to get at least 30 to 35 percent tax. But, the Volkswagen authorities gave only 5 to 15 percent import tax!
It has also been alleged that they have resorted to various unscrupulous means to evade taxes. Accordingly, they have concealed much information regarding imports, and misclassified and misrepresented much of the information.
All such imports are made from Volkswagen’s Indian manufacturing plant or unit – ‘Skoda Auto Volkswagen India’. Cars whose almost complete parts have been imported from India through tax evasion include – Skoda Superb, Kodiak. The list also includes – Audi Q5, VW’s Tiguan SUV etc.
India’s investigation into the matter has revealed that multiple separate shipments were used to evade import duties. So as not to impose a huge amount of tax at once. According to India, the Volkswagen authorities have deliberately violated the contract with India.
Sources claim that the 95-page notice has been sent to the Volkswagen authorities by the Maharashtra Customs Commissioner’s office. However, that notice has not been made public yet. However, the relevant sources of the news agency Reuters have seen the notice and accordingly the related reports have been published in various media.
According to the Indian government, since 2012, the German company is supposed to pay 2.35 billion US dollars to India due to import duties. But, they gave only 981 million USD. That is, India still owes 1.36 billion USD!
According to the organization, they always work in accordance with international law. In this regard, they are looking into the notice given by India. They have also assured full cooperation with the Government of India.